Dec 14 ’11
z/Vendor Watch: Recession Pushes Mainframe Prices Up, Not Down
The global economic downturn shows no sign of abating. Indeed, recent world events are really shaking market confidence, and the need to focus more on cost containment than on technical innovation remains a priority for CIOs.
There are, of course, many ways of using the mainframe platform to reduce costs, particularly when it comes to workload consolidation. However, there are a number of influences on mainframe pricing that are keeping those costs higher than they need to be for many users.
The Mainframe Market Bulletin recently highlighted the pressure on IBM to provide quarter-to-quarter earnings increases in order to honor a promise to shareholders by the current administration. Fulfilling this objective at a time when many new acquisitions are on hold has proved a particular challenge for IBM, and has resulted both in cost-saving measures (such as a headcount freeze) and price changes, including mid-year increases in software prices (and increases in the price of older versions), as well as unusually attractive offers on hardware to boost short-term revenues.
This all highlights the fact that, yet again, the mainframe world is working to a different agenda from the rest of the industry. Knowing how to take advantage of IBM’s short-term discounts, while avoiding the unprecedented software price hikes, is essential to maintaining the real cost advantages of the mainframe platform. Those with a high proportion of legacy and traditional applications are particularly vulnerable to these price movements and need to negotiate hard.
When it comes to the Independent Software Vendors (ISVs), the picture is equally complicated. Many of the smaller System z software specialists suffered during the early stages of the recession, as users attempted to reduce the number of third-party suppliers they support in order to achieve administrative savings and gain special deals from the remaining suppliers. The larger ISVs, such as CA Technologies and BMC, have encouraged this trend by opening up their portfolio of products to established customers for a small additional payment, reflecting the IBM tactic of bundling products into its Enterprise License Agreements. Some users, of course, rely on specific features in third-party tools that tie them into that particular product, but for many mainframe users it can make good economic sense to reduce the number of vendors they support and compromise on some of the less-critical features.
Like IBM, the ISVs tend to drive the hardest bargains among the users of legacy products that find it more difficult to move to another product. Indeed, to compensate for the diminishing volume of new sales, we’ve seen some dramatic increases in ISV prices for license renewals, as the vendors revert to list prices following heavily discounted initial sales.
Clearly, short-term price rises of this kind can throw small ISVs a lifeline, but will ultimately damage the relationship between customer and vendor. Once again, tighter negotiation can help System z users avoid falling victim to spiraling costs.
Around the Vendors
Security log management specialist CorreLog has announced an agent for z/OS. The new agent works with the company’s Security Correlation Server to correlate mainframe security events with those from other platforms and to notify the central control point of any potential security breaches.
Another useful security announcement is SecureData z/Protect from Voltage Software. The vendor of the multi-platform solution says the product makes encryption dramatically easier on the mainframe and that the z/OS Application Programming Interface (API) requires just one line of code!
Meanwhile, Syncsort, a well-established provider of System z tools, has unveiled a new offering aimed at the rehosting environment. Its DMExpress Application Modernization Edition works with products from Clerity Solutions, Micro Focus and Oracle, providing sort capabilities and sort card support to improve data integration between the mainframe and open systems.